This study examines the influence of content and emotional feedback expressed through social-media channels on 1) firm revenues and consumer purchasing decisions, 2) firm quality outcomes, and 3) firm operational and resource allocations. Using psychology theory as a framework and textual analyses methods, I classify web scrapings of millions of social media posts for 19 US airlines for the 2007-2019 period based on their cognitive content and emotional type. I identify social media word-of-mouth (SWOM) feedback about five quality-related themes and two emotional types. The results show that negative and non-negative quality-related SWOM impact consumer and firm outcomes. Firm revenues and consumer volume decrease (increase) following negative (non-negative) quality-related SWOM. Firms improve quality outcomes (such as on-time performance) following negative quality-related SWOM. Firms also alter the level of operations (carrying capacity), change pricing strategies, and enhance quality-cost investments (quality failure and signaling costs) following quality-related emotional SWOM. In additional analyses, I find that non-quality related SWOM has little to no impact on consumer and firm choices. This research highlights the usefulness of SWOM as a source of customer feedback for firms and its decision-facilitating role. It provides evidence that firms incorporate both the content and emotional type of customer feedback in their management control design.
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